More in Encore: The New Retirement

One, it is significantly less expensive for families than going to court, an advantage in today's tough economy; and two, an unprecedented intergenerational transfer of wealth is currently taking place. One report predicts that between 1990 and 2044, $10.4 trillion will be passed on to the baby-boom generation.

William Zabel, a prominent trust and estate lawyer, has been practicing law—and mediating estate disputes—for more than 50 years. We asked him to share his thoughts on the mediation process.

Lack of Clarity

WSJ: What kinds of disputes arise these days in family estate cases?

ENLARGE

William Zabel
Ben Asen

MR. ZABEL: It's surprising how many ruptures there are in families where wills aren't clear about who gets what. Many times a will is written with a simple provision stating: "The tangibles shall be divided equally among my children." Period. End of clause. Then all hell breaks loose.

The items being fought over aren't always particularly valuable. Sometimes a child will say he has wanted a particular painting ever since he was young. One of his siblings will say the same thing; a third will say that they all loved the painting. And then the fight breaks out.

WSJ: Why don't parents leave more specific instructions?

MR. ZABEL: Some people don't like paying attention to wills. There is too much boilerplate. They will spend tons of time and money avoiding income and estate taxes, but hardly any time on the nuances of their estate planning because they don't like the subject, and they don't think they will die for years and years.

In many cases, the children have secret wishes that don't come out until after a parent's death. Should you advise kids to indicate what items they would like left to them? That's a dilemma. Some parents ask their children to do that. I represent several families who have valuable paintings, most of which are going to a museum, but the parents are allowing each child to pick one painting

The trouble is that two of the paintings are worth multiples of the other, and there are four kids. So do you say to the children that you can each pick one and there will be a monetary adjustment for the goods in value? That's what should happen, unless they have, in other ways, made the inheritances equal.

ENLARGE

WSJ: Are there disputes over non-tangible items as well?

MR. ZABEL: Yes. Say you have four kids and you name two of them as executors. Why? Maybe it is because four seems an inconvenient number, and the two you choose are either the two oldest, or one of them may be a lawyer, or whatever. But if it's not explained to the children, all of whom are competent, you can create tremendous resentment.

WSJ: What are some specific items that children have fought over?

MR. ZABEL: Antique cars, jewelry, limited editions of a book on the family's history, a Persian rug. In the case of the Persian rug, it wasn't even worth that much—about $15,000 in a $50 million estate. But it was a beautiful rug, and two kids wanted it. Something can be very valuable, but it is usually not its value that is causing the pain and anger. It's the desirability.

One case involved a Winslow Homer painting. Irreparable harm was caused because the will didn't specify which of the three children should get it. The resolution—using a lottery—didn't leave one of the losers in a mood to forgive the winner.

WSJ: What is the lottery system? Are there other ways to settle disputes?

MR. ZABEL: In a lottery system, the children draw lots or straws to see in what order they should select the tangibles, rather than having the parents set forth in their will that the oldest child goes first. One nuance is to reverse the order of the lots in the next round, so the child who picked first in the first round then picks last in the second round, and so forth.

Or you can get a valuation of the whole pot and then divide it into fourths, if there are four children, thirds if there are three, and so on. You still have a lottery, but you have agreed on the values, which is good because there can be a huge fight just over the value of one piece of property.

In-Laws and Lawyers

WSJ: What is the biggest snag mediations hit?

MR. ZABEL: Sibling rivalry is one of the biggest, along with disputes caused by in-laws. One of the daughters-in-law or sons-in-law goes to battle because they want their views put forward even though the children alone were getting along fine.

Mediations also fall apart because the lawyers compete with or are antagonistic toward each other. The way it works is that the mediator reaches a result and drafts an agreement, which is usually nonbinding. Then each party can hire a lawyer to review the agreement. If the lawyers aren't helpful, the mediator loses the ability to settle.

WSJ: You hold a number of cultural and civic positions—among others, a director of the Lincoln Center Theater and a trustee of New York University. Do these interests help in your mediation practice?

MR. ZABEL: I think the more-rounded any mediator is, the more likely he or she is to put to use their knowledge of people's psyches, to take into account all the sensitivities of the families involved, not just the economics or the law. Perhaps a psychiatrist would make the best mediator.

WSJ: What advice overall do you have for families in the middle of estate disputes?

MR. ZABEL: My advice is that there is hardly any downside to trying to mediate before you litigate. There may be a roadblock that can't be solved by mediation or litigation because it involves such deep psychological differences or resentments, or some ancient sibling rivalry. Maybe mediation is tougher in estate disputes than in divorce cases because it is all or nothing: You can't give half a Persian rug to somebody, whereas in a divorce, you are often mediating over dollars, which can be divided up.

But in general, the lasting anger and bitterness of litigation doesn't seem to occur when matters are settled by mediation.

Ms. Shell is an editor at the Wharton School of the University of Pennsylvania in Philadelphia. She can be reached at encore@wsj.com.

Robbie, this seems to be a tough subject for most that have been in a similar situation. I assume that some families get torn apart and never recover from the impacts of a will that doesn't give many specifics. It seems that in an instance with real estate the best solution might just be to sell it? I haven't been in this situation yet, but it's good to get prepared for any and all types of situations.

That is too bad some people get in huge fights over things like this. The last thing my parents would want is for us to fight over their things once they are gone themselves. I guess this goes to show why proper planning with a family lawyer would be a good idea.

It seems like there is a lot of planning that goes into writing and carrying out wills. I liked when Mr. Zabel mentioned that for a lot of people, they don't think they are going to pass on for some time, so they don't pay attention to wills. My parents are getting up there in years, but I am pretty sure they have written a will with a lawyer's help already and have mentioned the appropriate assets. Hopefully things can go smoothly in our family when it comes to wills and the law behind them. http://becklawhastings.com/practice-areas

I had no idea that there were so many issues to consider when considering family mediation. I have always thought that it would be simpler because my family seems to get along just fine, but crisis seems to bring out the worst in people. It's good to know these hints before looking for mediation services! Thanks for your suggestions. http://www.strichlaw.com/family_law_mediation.html

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